Building Momentum

Building starts climb 19 percent in China and Southeast Asia

The value of non-industrial building starts increased 19 percent to more than US$40 billion in the combined region of Southeast Asia and Greater China in the first half of 2006, compared to the same period last year, according to a BCI Asia research survey. The high rate of growth was driven by a flurry of activity in the hotel and office sectors across the region as well as an acceleration of starts for apartment projects in China.

The highest growth rate of non-industrial building starts was 164 percent in the Philippines, a sign that confidence has been restored in the government and the national economy. Non-industrial building starts were up 65 percent in Vietnam, now a considerable market for architectural design services. Mainland China enjoyed a 20 percent rise and Indonesia and Thailand were up 12 percent. Meanwhile the value of non-industrial building starts declined 4 percent in Hong Kong and 10 percent in Malaysia.

Hotel building starts increased more than US$1 billion in the first half of 2006 across the region compared to the same period last year. The 44 percent increase in this category includes new buildings to be used as hotels, backpacker accommodation, resorts and serviced apartments as well as major renovations of any buildings used for these purposes.

Building starts for hotel projects in Mainland China in the first half of 2006 increased 39 percent to US$2.3 billion in anticipation of rising demand for international standard hotel rooms in cities across the country. Construction starts in the first half of this year included interesting projects such as the five-star Manzhouli Shangri-La Hotel in Inner Mongolia, a 22-storey building with 220 guest rooms that is being built by the Dalian branch of the China Construction Eighth Engineering Division. In Hangzhou, Zhejiang province, the Zhejiang Construction Engineering Group Co Ltd started building the 18-storey Hangzhou International Conference Centre containing a Marriott hotel with 300 guestrooms. In the Chaoyang district of Beijing, Jiangsu Huajian Construction Co Ltd began construction on the 27-storey Garden Hotel to be operated by InterContinental Hotels Group.

The hotel sector was surprisingly strong in Thailand despite the national political deadlock. Hotel construction starts in the first half of 2006 included the five-star Sail Hotel in Pattaya, the four-star Rain Tree Hotel in Chiang Rai, the four-star Marriott Courtyard Hotel in Bangkok and a new building at the five-star Banyan Tree hotel in Phuket.